Nepal's embattled King Gyanendra has agreed to reinstate Parliament, in an effort to end weeks of unrest by opponents to his absolute rule.
The king has been running the country directly since February 2005
The move is aimed at "protecting multi-party democracy and restoring peace," he said in a televised address.
This came on the eve of a huge rally planned by the opposition. At least 14 people have died in a wave of protests.
The king assumed direct powers in February 2005, saying parties were unable to deal with Maoist rebels.
He said the lower house of parliament would reconvene on Friday.
On Monday thousands demonstrators defied a shoot-on-sight curfew in the capital Kathmandu.
The restoration of parliament was welcomed by leaders of the opposition alliance, who said the protest would turn into a victory rally.
However the BBC's Dan Isaacs in Kathmandu says the king's statement does not address all the concerns of the opposition parties.
For them and the hundreds of thousands who have taken to the streets, the key demand was for a review of the constitution which currently gives the king sweeping powers, our correspondent adds.
Opposition leader Shobhakar Parajuli told the BBC that it was now for the alliance to meet in the morning to discuss the next step in resolving the crisis in the country.
At the weekend opposition parties rejected an offer by King Gyanendra that they name a prime minister, saying it did not go far enough.
In his address the king expressed his "heartfelt condolences to all those who have lost their lives in the people's movement and wish the injured speedy recovery".
Protesters have continued demonstrating despite repeated curfew
He added: "We are confident that the nation will forge ahead towards sustainable peace, progress, full-fledged democracy and national unity."
The protests and a crippling strike has led the United States to ordered all its non-essential diplomatic staff and their families to leave Nepal.
They are reported to be concerned about dwindling food and medical supplies and the sometimes "violent measures" used by the authorities to break up the protests.
More than 13,000 people have died in the 10-year Maoist insurgency aimed at replacing the monarchy with a communist republic.
Violence has escalated since the rebels ended a truce in January - although they declared a ceasefire in Kathmandu this month as street protests began against King Gyanendra.
A series of curfews have been in force in the city in recent days, but ignored by demonstrators.